Run the numbers and -- despite a sizable subsidy in the budget plan -- NJT could be facing a $60M deficit

Members of New Jersey Citizen Action and the Amalgamated Transit Union protest inside Newark Penn Station.

At first, it sounds like good news for New Jersey Transit. Buried inside the budget documents that Gov. Chris Christie released earlier this month is a proposal to significantly increase New Jersey Transit’s state subsidy. In fact, it could get a boost of more than $127 million if state lawmakers sign off on the deal.

But transportation experts and advocates say now is hardly a time to celebrate.

NJ Transit faces a possible strike next month by 4,200 rail employees who have been working without a contract since 2011. And that generous state subsidy is being offered even as Christie and Democratic legislative leaders have yet to strike a deal to renew the state’s Transportation Trust Fund, so millions of dollars in capital funding for New Jersey Transit hang in the balance.

A group of protesters loudly voiced those concerns yesterday morning inside Newark Penn Station as lawmakers, business leaders, and lobbyists prepared to board a train headed to Washington, D.C. for an annual networking trip organized by the New Jersey Chamber of Commerce. The protest was organized by New Jersey Citizen Action, whose members chanted “Fund Transit Now” as those in the line for the train trip shuffled by.

“The message is really to fund transit and to fund the Transportation Trust Fund,” said Doug O’Malley, a co-chair of the New Jersey For Transit coalition. “It’s been a generation of underinvestment.”

“We’re here to remind them that while they bought a pricey ticket on this train, hundreds of thousands of NJ Transit riders are being left behind,” said Phyllis Salowe-Kaye, the executive director of New Jersey Citizen Action.

But arguably the most pressing challenge for New Jersey Transit right now is the potential for a strike to occur on a March 13, a date that’s been set by unionized workers who’ve been unable to come to an agreement with management on both pay hikes and changes to health benefits. The agency’s last rail strike took place in the 1980s, with outside bus drivers pressed into service in an attempt to get commuters to work in Manhattan or elsewhere within the state.

Dennis Martin, New Jersey Transit’s interim executive director, said it’s too early to discuss the specific details of his agency’s latest plans for another work stoppage if it were to occur.
“NJ Transit is actively involved in developing a robust alternative service plan in the event the unions call a strike,” he said in a statement. “We are working with our regional partners, including NJDOT, to provide as much service as possible to our customers.”

“We remain focused on reaching an affordable settlement with the rail unions for our customers,” Martin said, which is a sentiment that is also being echoed by union officials as the strike date draws closer.

Ray Greaves, chairman of the Amalgamated Transit Union state council and a member of New Jersey Transit’s board of directors, put the blame for the agency’s money problems squarely on Christie, saying he hasn’t made funding transportation enough of a priority.

“Transit in New Jersey is in crisis,” Greaves said. “We have a governor that refuses to address the problem.”

Christie’s proposed budget for the next fiscal year, which begins July 1, calls for a $160.9 million state subsidy for New Jersey Transit. That would more than quadruple the $33.2 million that was allocated for the agency in the budget for the current fiscal year, which ends June 30.

Another $62.1 million is budgeted for New Jersey Transit in Christie’s fiscal year 2017 spending plan out of the Clean Energy Fund, which is supposed to use revenue generated by a tax on New Jersey electric and gas users to promote cleaner ways of producing energy.

And New Jersey Transit will receive $204 million from the New Jersey Turnpike Authority during the next fiscal year, a reduction from the $295 million that’s being provided during the current fiscal year, according to budget documents.

The proposed increase to New Jersey Transit’s state subsidy, Greaves said, falls far short of prior years, when the agency received a more than $300 million state subsidy.

“What he’s giving us back now is a crumb,” Greaves said.

Christie’s office did not respond to that criticism when asked by NJ Spotlight for a response yesterday.
Janna Chernetz, senior New Jersey policy analyst for the Tri-State Transportation Campaign, said by her count the agency will still be facing another $60 million budget gap despite the increased state subsidy.

Chernetz also said leaving the agency’s funding up to budget negotiations -- which usually take place between the governor and legislative leaders in late June as the deadline for a new spending plan approaches -- adds to the uncertainty. She’d rather see a dedicated source of revenue for New Jersey Transit to take away each year’s political intrigue.

“What is proposed in February does not always equate to what happens in July,” said Chernetz, who is also a co-chair of the 18-member New Jersey For Transit coalition.

And though the Transportation Trust Fund is set up to pay for capital projects, Chernetz said it remains a part of the New Jersey Transit discussion because the agency for years has been diverting some capital funds to cover operating expenses. Right now, the trust fund will run out of money on June 30, though both Christie and lawmakers have signaled a willingness to strike a bipartisan deal to renew it before the deadline.

Still, Chernetz said she fears another fare increase could be looming. It would be the third such increase in the last six years, following hikes of 9 percent last year and 25 percent in 2010. The impact on passengers – and the broader state economy -- would be huge, Chernetz said.
“Another fare increase is going to turn a public service into a luxury,” she said.